Executive Plans to Move Device Maker, Breathe Technologies, Inc. to SoCal, Expected to Hire 25 and Grow to 70 or More in the Future

OCBJ -- Medical device maker Breathe Technologies Inc. plans to move its headquarters to Orange County from the Bay Area by July.

The company, now based in San Ramon, “more than likely” will settle in Irvine, said Larry Mastrovich, Breathe’s chief executive and a former executive at Lake Forest-based home healthcare provider Apria Healthcare Group Inc.

The company is looking for a building for its corporate offices as well as manufacturing, he said.

The maker of devices for respiratory disorders is expected to start with 25 local jobs and grow to 70 or more people in its third year of operation here, according to Mastrovich.

The company’s devices also target sleep apnea, another breathing disorder.

Breathe’s lead product, the BT-V2S portable ventilator, recently received Food and Drug Administration clearance for home use.

BT-V2S is set to start selling to hospitals and home healthcare companies by the fourth quarter, according to Mastrovich.

Breathe doesn’t have any sales yet.

The number of medical device workers in South County and northern San Diego County drove Breathe’s decision to move here, said Mastrovich, a Coto de Caza resident who previously was president and chief operating officer of Apria Healthcare.

“It is close to people,” he said. “We have 10 competitors that are in the marketplace that we can recruit talent from.”

Rivals

Rivals include CareFusion Corp. and ResMed Corp., both of San Diego, and Philips Respironics, a suburban Pittsburgh unit of the Netherlands’ Royal Philips Electronics NV.
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Philips has chronic obstructive pulmonary operations in Carlsbad and La Mirada.

For sleep apnea, Breathe’s rivals include New Zealand’s Fisher & Paykel Healthcare, which has operations in Irvine.

Breathe expects to commercialize BT-V2S with its current funding, Mastrovich said. The company will decide whether to seek another round of funding in the third quarter, he said.

Lucrative Market

Chronic obstructive pulmonary disease is a lucrative market: Mastrovich estimated that it affects 12 million Americans and is a $43 billion yearly market.

It’s usually treated by inhaled drugs, oxygen, lung-reduction surgery or full ventilation with life support.

Breathe’s ventilator seeks to drive oxygen deeper into the lungs, “offloading the lungs and their respiratory muscles from all the work of breathing,” Mastrovich said.

Breathe could hit an even larger market with sleep apnea. Some 25 million Americans have some level of breathing obstruction when they sleep. The number is growing at a 14% yearly rate, according to Mastrovich.

He spent 25 years with Apria, the largest home healthcare provider in the U.S. Apria went private in a 2008 buyout by Blackstone Group LP.

Mastrovich left the company in early 2010 after sticking “around for about 15 months” to help with the transition.

He became Breathe’s chief executive in November.

A personal relationship with Breathe’s chairman, John Miclot, led Mastrovich to the company.

Mastrovich’s time at Apria, which provides breathing treatments to patients in their homes, is useful at Breathe, he said.

“The customer base is really the same customer base that I’m used to working with,” Mastrovich said.